“The coal sector, at least in the United States, has been relatively flat and the prognosis in the coming decade is that it will decline, and so that in itself with cause an excess supply of workers. But in general we have large volumes of folks in the U.S. and the lifestyle opportunities here are strong and I think are going to be very appealing,” said GJH’s Scott Carmichael.
As Australia seeks to recruit more miners from the U.S., Wyoming’s PRB mines continue to cut production and jobs due to weak demand. According to reports in Gillette’s Star-Tribune, producers are paying the price for weakening demand because of a warm winter and utilities switching away from coal to cheap natural gas, according to companies with mines in the basin.
St. Louis-based Arch Coal Inc. said it has idled some equipment and will idle more later this year. St. Louis-based Peabody Energy Corp. and Gillette-based Cloud Peak Energy Inc. said they’ve also cut some temporary workers and contractors at their PRB mines.
Last year, coal producers in Wyoming’s portion of the basin produced 426 million tons of coal. Slow demand this year could cut 2012 production in the basin by 40 million tons “due to the low demand and coal to gas switching,” said Colin Marshall, Cloud Peak president and CEO, in a conference call with analysts.
Arch Coal, which produced 115 million tons from two mines in the PRB last year, said, “severe weakness” in the U.S. market for coal used to generate electricity cut sharply into its first-quarter earnings and forced it to further curtail production for the year. Arch idled one dragline, switched another to reclamation work, and limited loading of rail cars in its Wyoming mines. The company will have three draglines idled before the middle of the year.
Peabody spokeswoman Beth Sutton told the Gillette News-Record the company recently cut some temporary workers and contractors to match production totals, totaling less than 2% of its PRB workforce. That’s less than 40 workers, according to federal employment data.
“The U.S. coal industry is in the midst of a restructuring that will cause some players to exit the market and others, like Arch, to pare back operations until market conditions improve,” said John Eaves, Arch president and CEO. “Such change creates opportunities for our company, which is well-equipped to move tons offshore to serve growing global coal demand.”